So I know that converting a grayscale image to a normal map is technically incorrect because the converted normal map parts do not actually correctly form to the tangents of your low poly model, but is there any way to make this work? Im assuming that when people do this they are just saying "fuck it" and letting it slide even though it is technically an inaccurate way to add parts to a normal map.
The way I'd want to use this and have used this in the past is by adding textural details, like fabric details in photoshop to the diffuse texture then converting that using something like the NVIDIA normal map filter but Im having second thoughts on ever doing that again since it might not be correct. And I guess this also means that using nDo's normal map creation tools is technically wrong as well. What is the general thought and wisdom behind techniques like this? Is it generally better to be a purist about normal maps or is the conventional wisdom that it just doesnt really matter since it doesnt create that huge of a negative impact on the quality of a normal map?
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That's a pretty major simplification, but it's a huge topic.
for flat surfaces, useing ndo2 or what ever works pretty good, i ussualy just tweak it a little and take down the blue channel on added details.
in the end it doesn't have to be all 100% mathematically correct, as along as the end product looks fine.
Now if you don't have a baked normal map to start with, there is just no way you can "paint" a height map that would ever be as accurate, because as you say it doesn't take the normals and tangents of the lowpoly mesh into consideration.